UPDATE 1-Bumi Resources shares slide after reporting hefty net loss

Thu Jan 3, 2013 5:03am EST

* Bumi Resources swings to $632 million loss from profit year ago

* Bumi Resources posted losses on derivatives of over $422 million

* Bumi Resources at centre of row between the Bakries, Nat Rothschild

By Andjarsari Paramaditha

JAKARTA, Jan 3 (Reuters) - Shares in PT Bumi Resources , at the heart of a bitter dispute between Indonesia's Bakrie family and British financier Nat Rothschild, dropped almost 5 percent at one stage after the coal miner reported a heavy nine-month net loss.

Bumi Resources, part-owned by the Bakrie Group and Rothschild's joint venture Bumi Plc, has plunged 72 percent in Jakarta trading in the past year, weighed down partly by concerns over corporate governance and boardroom battles.

Ties between the Bakries and Rothschild soured soon after the London listing of Bumi Plc two years ago. The conflict came to a head in September with news of allegations of wrongdoing and a probe into operations including Bumi Resources.

Dealing yet another blow to Bumi Resources and its shares, the firm posted on Wednesday a $632 million net loss in the nine months to September compared to a net profit a year earlier, hit by losses on derivatives of over $422 million.

"If we disregard the materially large loss on derivative transactions, the adjusted 9M loss of $210.4 million is worse than our expectation of a full-year loss of $166.7 million and consensus expectation of a full-year profit of $24.6 million," UBS mining analyst Andreas Bokkenheuser said in a note.

Bumi Resources director and corporate secretary, Dileep Srivastava, said the derivatives and foreign exchange losses were paper losses.

"There's no cash impact at all," he told Reuters in a telephone interview from Dubai. "These are all non-cash and tax-neutral because we are adapting to new accounting principles that we are adopting."

As of 0801 GMT, Bumi Resources shares were 4.84 percent lower from the previous day's close at 590 rupiah, compared to a high of 8,200 rupiah on June 30, 2008. They have been on a sharp decline since reaching a peak in 2012 of just over 2,500 rupiah at the end of last January.

Thursday's share performance by Asia's biggest exporter of coal used in power stations was in stark contrast a record high in the main market index.

HIGH DEBT LEVELS

Investors have also heavily discounted Bumi's shares against a booming Indonesian stock market in the past three years because of high debt levels.

"From a credit standpoint, we have been placing, and will continue to place, more emphasis on the company's cash flow generation capabilities, as the company repays its debt and interest with the cash it generates," Standard & Poor's Asia-Pacific associate director of corporate ratings Jean Xavier told Reuters.

Bumi Resources' cash flows since the beginning of 2012 have not been directed affected by the loss, which is a non-cash loss, Xavier said by email.

"The ability of Bumi Resources to generate more cash flows in the coming quarters, from higher sales volumes and lower costs, and the refinancing of the debt due in 2013 are the major factors we are looking at," he said. (Additional reporting by Fergus Jensen; Writing by Jonathan Thatcher; Editing by Ryan Woo)

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